Finding Text
Information on the federal program – All federal programs
Criteria or specific requirement – As stated in 2 CFR §200.303, the non-federal entity (i.e., the Center) must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations and terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
According to 2 CFR §200.214, the non-federal entity is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities.
Condition – During the 2022 audit, the predecessor auditor noted several cases in which the Organization did not perform, or did not maintain proper support to demonstrate that it performed checks via SAM.gov to ensure that potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such parties increases the possibility that U.S. Government funds may inadvertently be provided to individuals or organizations deemed to be excluded by the U.S. Government. The matter has not been resolved in 2023.
Cause – Management did not have effective internal controls in place to ensure that suspension and debarment was being performed prior to entering into contracts with vendors or contractors/consultants.
Effect or potential effect – The Organization is exposed to an increased risk that future noncompliance could occur by entering into transactions with vendors, contractors, or consultants that are suspended and debarred.
Questioned costs – None
Context – The Organization failed to perform and/or properly document its due diligence with respect to these requirements. The issue is considered systemic in nature.
Identification as a repeat finding, if applicable – Is a repeat finding (2022-010)
Recommendation – We recommend the Organization implement internal controls to ensure that all vendors, contractors, and consultants are screened for suspension and debarment prior to entering into any executed contract. We further recommend that a policy be formalized and implemented that requires an annual screening of any current vendors, contractors, or consultants as well.
Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.